Balanced scorecard methodology is an analysis technique designed to translate an organization’s mission statement and overall business strategy into specific, quantifiable goals and to monitor the organization’s performance in terms of achieving these goals.
The methodology examines performance in four areas:
- financial analysis,
- customer analysis looks at customer satisfaction and retention;
- internal analysis looks at production and innovation, measuring performance in terms of maximizing profit from current products and following indicators for future productivity; and finally,
- learning and growth analysis explores the effectiveness of management in terms of measures of employee satisfaction and retention and information system performance.
Benefits of using balanced scorecard:
- improve organisational performance by measuring what matters
- increase focus on strategy and results
- align organisation strategy with workers on day-to-day basis
- improve communication of organisation’s vision and strategy
- prioritise projects and initiatives